When evaluating stock, the required return is equal to the dividend yield plus the: (be sure to select all that apply).

		current stock price
		growth rate
		just paid dividend
		quoted rate
		capital gains yield

Wilson, Inc., is considering a new four-year expansion project that requires an initial fixed asset investment of $1,875,000. The fixed asset will be depreciated straight-line to zero over its four-year tax life, after which time it will be worthless. The project is estimated to generate $2,040,000 in annual sales, with costs of $1,235,000. If the tax rate is 35%, and the required return on the project is 12%, what is the project's NPV?

Hint: Use Tax Shield Approach to calculating Operating Cash Flow formula learned in Chapter 9

		$212,608
		$2,087,608
		-$12,608
		$771,875
		$44,469

Suppose you know that a company's stock currently sells for $57 per share and the required return on the stock is 10.4%. You also know that the total return on the stock is evenly divided between capital gains yield and dividend yield. If it's the company's policy to always maintain a constant growth rate in its dividends, what is the current dividend per share? What is the dividend per share in Year 4?

	1.	$2.68; $3.27
	2.	$2.82; $3.45
	3.	$2.96; $3.45
	4.	$2.96; $3.63
	5.	$2.82; $3.63

Suppose Pale Hose, Inc. has just paid a dividend of $1.55 per share. Sales and profits for Pale Hose are expected to grow at a rate of 8% per year. Its dividend is expected to grow by the same amount. If the required return is 14%, what is the value of a share of Pale Hose?

	1.	$18.00
	2.	$25.20
	3.	$27.90
	4.	$30.60
	5.	$32.40

What is the IRR of an investment that costs $19,250 and pays $5,500 a year for 5 years?

	1.	12.92%
	2.	13.20%
	3.	17.75%
	4.	25.20%
	5.	27.95%